Grassley amendment limits payments

Rejecting arguments that it was an attack on “agriculture as we know it in the South,” the Senate approved an amendment to its 2002 farm bill that would limit farm payments to $225,000 for a single farmer and $275,000 to a husband and wife.

The amendment, named for its principal author, Sen. Charles Grassley, R-Iowa, would also eliminate the “three-entity rule” that allows farmers to receive payments on more than one farming operation and generic commodity certificates that primarily have been used for marketing cotton.

While proponents of the amendment, mostly from the Midwest, claimed the amendment would redirect payments to small- to medium-sized family farmers, opponents, mostly from the Southern states, said it would devastate their family farmers.

“We don't have enough money for everybody, so we should invest the best we can for family farmers,” said Sen. Byron Dorgan, D-N.D., one of the amendment's co-sponsors who argued that unless something was done about reports of millions of dollars in payments to big farmers, “taxpayers would stop supporting farm programs.”

But opponents of the amendment blasted the “vile, misleading” information produced about farm payments that they said had created a false impression about farmers who work the land.

“This amendment is being pushed by groups who claim to represent the interests of the family farmer, but who, in fact, could care less about the family farmer,” said Sen. Blanche Lincoln, D-Ark., who led the opposition in the floor debate on the amendment.

Instead, she said, “These groups wouldn't shed a tear to see American agriculture dead and buried. It is shameful enough that those who spread these stories claim to do so in the name of the farmer while in fact working to remove him from the very land he farms.”

Major farm organizations that lobbied hard against the amendment expressed disappointment at the vote.

“The vote shows a serious lack of understanding about commercial agriculture,” said James Echols, National Cotton Council chairman and a cotton merchant from Memphis, Tenn. “This amendment dramatically changes the impact the Agriculture Committee bill will have on America's farmers and ranchers.”

The amendment, which was the subject of more than two hours of debate on the Senate floor, passed by a voice vote, making it difficult to determine how many senators voted for it. But an earlier attempt to table it failed 66-31.

Opponents of the amendment said they would attempt to eliminate the measure or soften it in the House-Senate conference that will follow if the Senate passes a farm bill. Senate passage of the long-awaited bill could come as early as Feb. 15.

Lincoln, who acknowledged her ties to a family farming operation near Helena, Ark., noted that a farming couple named Gary and Pam Bradlow of England, Ark., are listed on one Web site as the top recipient of farm payments in their area.

“Surely then, the Bradlows must operate a big farm,” she said. “Surely, they are wealthy plutocrats jetting about the Caribbean in their yacht. In fact, the Bradlows are struggling to keep their heads above water.”

While the Bradlows farm 2,000 acres in central Arkansas, Lincoln said, “they barely achieve the economy of scale they need to survive. This is because they grow rice, which is the most expensive, capital-intensive crop a farmer can grow. The other most expensive crop to grow is cotton, which happens to be the other main crop in Arkansas.”

She cited a series of figures such as $100,000 for larger tractors and $285,000 for a six-row cotton picker as reasons why those crops are so much more expensive to produce than corn and soybeans.

Another Southerner, Sen. Zell Miller, D-Ga., called the Grassley-Dorgan amendment an “attempt to wipe out agriculture in the South as we know it.”

Miller, who noted that those $285,000 cotton pickers are manufactured in Grassley's home state of Iowa, said the amendment was an attempt to put Southern farmers at a disadvantage in the crops they grow in common with farmers in the Midwest states.

“What they're saying to farmers in the South is ‘hold still, little catfish, all I'm going to do is gut you,” he said.

The National Cotton Council's Echols said an NCC analysis shows the amendment would impact the average American cotton producer even more seriously than initially believed.

“It seems clear that many Senators did not understand how this amendment destroys the nonrecourse loan — a farm program mainstay for more than 30 years,” he noted. “The Grassley/Dorgan amendment effectively removes this last, viable safety net for America's farmers.”

Echols said the NCC analysis indicates that the Grassley amendment puts such severe limitations on marketing loan gains and fixed and counter-cyclical payments that production financing will be out of the question for most farmers across the southern tier of the United States. With current commodity prices, many farms cannot cash flow, even with current restrictions on payments.

“It is unfortunate that the Senate has used payment limits to essentially gut an otherwise good farm bill,” he noted. “The result is a unilateral disarmament of our farmers just ahead of resumption of another round of World Trade Organization (WTO) talks. If these provisions survive in a final farm bill, our negotiators will have little hope of convincing the rest of the world to reduce farm subsidies.

“It has been our contention that farm subsidy reductions should be done under the auspices of the WTO and in a way that is fair and equitable for American agriculture — not at their expense.”

There was a moment of confusion in the Senate when Dorgan listed Sen. Thad Cochran, R-Miss., as a co-sponsor of the amendment. A few minutes later, Dorgan admitted that he had made a mistake and asked that Cochran's name be stricken from the record as a co-sponsor.

Are farm groups losing influence on policymaking?

For years, the Senate — and the House, for that matter — generally has followed the lead of the major farm and commodity organizations when it came time to write farm legislation.

On Feb. 7, however, the Senate shrugged off a letter drafted by the major farm groups expressing opposition to an amendment imposing stricter limits on farm payments and passed it by an overwhelming majority.

In rejecting the recommendations by the majors, some sponsors of the amendment authored by Sen. Charles Grassley, R-Iowa, cited another letter drafted by 35 lesser-known “farm organizations” as lending their support to the draconian measures the legislation would impose on farm payments.

Among the latter were such well-known farm organizations as the California Institute for Rural Studies, the Evangelical Lutheran Church in America, the Union of Concerned Scientists, Ohio Citizen Action, and the Environmental Working Group.

The majors (including American Farm Bureau Federation, American Soybean Association, National Association of Wheat Growers, National Cotton Council and rice producer groups) raised strong objections to the amendment in their letter.